WASHINGTON, D.C. – U.S. Senator Pat Roberts, R-Kan., Chairman of the Senate Committee on Agriculture, Nutrition, and Forestry, today held a hearing titled, “The State of the Derivatives Market and Perspectives for CFTC Reauthorization.”
“This Committee has distinct jurisdiction over the Commodity Futures Trading Commission and its role implementing law governing the world-wide derivative markets as authorized in the Commodity Exchange Act,” said Chairman Roberts.
“We have worked together, in a bipartisan fashion, to confirm nominees and to ensure that the Commission is fully functioning. As we move forward with reauthorization, it is important Congress provide CFTC with certainty. We should do our job, and not just for some of this Committee’s agencies and stakeholders, but for all of those impacted by the laws within our purview.”
To watch the hearing and read testimony, click here.
Click here to watch Chairman Roberts’ opening statement. Below are Chairman Roberts’ remarks as prepared for delivery:
I call this hearing of the Senate Agriculture, Nutrition, and Forestry Committee to order.
Before delivering my opening statement, I ask unanimous consent that written testimony from a number of coalition groups and trade associations be submitted for the record.
The Senate Agriculture Committee has the responsibility of reauthorizing programs administered by multiple federal agencies and commissions. Notably, the Committee addressed numerous programs of the U.S. Department of Agriculture. I would note, yet again, the Committee reauthorized hundreds of programs worth billions of dollars last year in the Farm Bill and in doing so, fulfilled its role by providing certainty and predictability to many stakeholders.
This Committee also has distinct jurisdiction over the Commodity Futures Trading Commission and its role implementing law governing the world-wide derivative markets as authorized in the Commodity Exchange Act.
While the CFTC has continued to receive funding as it works to ensure U.S. derivatives markets function properly and in an open, safe and transparent manner, it has done so without authorization since October 2013, almost six years.
I think it’s fair to say a lot has changed since the last time CFTC was reauthorized alongside the 2008 Farm Bill.
We have seen the rollout and adoption of a number of regulations as required under the Dodd Frank Act. They have created greater transparency in the “Over the Counter” derivatives markets, while still ensuring non-financial end-users are provided flexibility in the way they utilize derivatives to hedge their commercial risk.
Recently, we have seen legislative efforts in the European Union which will have the unfortunate effect of undoing the agreed-upon mutual recognition of foreign based clearinghouses, likely creating uncertainty for some of our most important global financial stakeholders.
And, we have seen incredible advances in technology, including the emergence of blockchain technology. In addition to supporting the emergence of Bitcoin and other cryptocurrencies, it has the potential to revolutionize the way companies do business, including speeding up the time it takes to verify and execute international commodity trades.
We have worked together, in a bipartisan fashion, to confirm nominees and to ensure that the Commission is fully functioning. As we move forward with reauthorization, it is important Congress provide CFTC with certainty. We should do our job, and not just for some of this Committee’s agencies and stakeholders, but for all of those impacted by the laws within our purview.
Within this process, it is important we listen to stakeholders to better understand what is or is not currently working. We must explore what provisions may need a legislative update to reflect current and future market dynamics and what the CFTC already has the authority to accomplish through rulemakings.
This hearing is designed provide us with that opportunity.
Our panel of distinguished witnesses today covers a broad spectrum of industry stakeholders and perspectives.
We will hear from the derivative industry’s Self-Regulatory Organization with an update on the safety and soundness of U.S. derivative markets, and insight on legislative recommendations for further strengthening our consumer protections.
We will hear from a leading global trade association representing exchanges, clearing firms, swap dealers, asset managers, and other financial stakeholders about current market trends.
We will hear testimony from one of our nation’s leading agricultural cooperatives about the vital role derivatives play for our stakeholders in hedging their commercial risk in the production and marketing of our nation’s Ag commodities.
And lastly, we will hear from a consumer advocacy organization formed after the 2008 financial crisis about any additional reforms it believes may be necessary.
I thank you all again for joining us, and I look forward to our conversation today about the state of global derivative markets and CFTC reauthorization.
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